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Averages > TFS: Tether Line

Article/Author: "How To Get In With The Trend And Out At The End", Bryan Strain, S&C Magazine, Traders Tips, 06/2000

Download: Tfs.ela

File Includes:

Indicator - Tether Line
Indicator - TFS: MBO Indicator
Indicator - Vol Osc Avg
Strategy - TFS Signal

Category: Indicator > Averages

Description:

Tether line indicator is the first component of TFS trading strategy. It was named this way because stock prices have a tendency to cluster around it. It means that stock prices tend to move away from the midpoint between their 50-day highs and lows, then return to that midpoint at some time in the future. On a chart, it appears as though the stock price is tethered to this line, and hence the name.

Usage:

The indicator is used to trigger a buy opportunity and trailing stop. When the close crosses above the tether line, a buy signal is triggered. When the close crosses below the tether line, trader should exit the position.




Inputs:

Length - the parameter tells how many bars to average

EasyLanguage Code:
INPUT: LENGTH(50);

VARIABLES: HIGHVAL(0), LOWVAL(0), TETHER(0);

HIGHVAL = HIGHEST(HIGH, LENGTH);
LOWVAL = LOWEST(LOW, LENGTH);
TETHER = (HIGHVAL + LOWVAL) / 2;

PLOT1(TETHER, "TETHER");